Internationalizing the French auditing profession

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Accounting Historians Journal
Vol. 36, No. 1
June 2009
pp. 29-59
Ignace De Beelde
GHENT UNIVERSITY
Nathalie Gonthier-Besacier
CERAG UMR CNRS 5820/IAE GRENOBLE
and
Alain Mikol
EUROPEAN SCHOOL OF MANAGEMENT (PARIS)
INTERNATIONALIZING THE FRENCH AUDITING PROFESSION
Abstract: The objective of this paper is to trace the development of the French auditing profession, the commissaires aux comptes, focusing on the appearance of the large Anglo-American audit firms on the French market. The French audit market has always shown a number of peculiarities, including the continued importance of a number of local audit firms. The French auditing profession finds its roots in late 19th century company law that introduced an obligation for compa­nies to release audited financial statements. The profession became regulated in its modern form in the 1960s. This paper attempts to explain the growing impact of the international audit firms on the French auditing profession. It also demonstrates how local profes­sionals and the French state reacted to these developments.
Introduction
Most European audit markets have witnessed significant changes over recent decades. A striking development that has elicited academic curiosity is the growing impact of the large Anglo-American audit firms on local audit markets. The develop­ment of audit markets has been well studied in many venues, generally from an economic perspective using contracting theory as the framework for the analysis of developments in the supply of audit services [e.g., Watts and Zimmerman, 1983; Craswell et al., 1995; Holmes and Zimmer, 1998]. The existence of large accounting firms is partially explained by economies of scale. Summarizing the relevant literature, Meuwissen [1999] concluded that large audit firms obtain cost advantages and re­ceive fee premiums, probably due to product differentiation.
Acknowledgments: The authors thank the CERAG Grenoble for its editing support and the referees for their helpful comments.